JUDGMENT

1. The plaintiff in this suit is the Nawab Bahadur of Murshidabad. His case is to the effect that, on 25th July 1920, he borrowed a sum of Rs. 8,00,000 from the defendant, Rame swarlal Ganeriwalla in the benami of Bilasroy Chowdhury and Srilal Chamria on the security of certain immovable properties in Calcutta and also of two life insurance policies belonging to plaintiff. According to him, the understanding was that the defendant should reimburse himself for the principal and interest of the loan out of the rents and profits of the immovable properties (and in case of his death, from the proceeds of the two insurance policies).

2. In 1927 the plaintiff instituted Suit No. 1384 of 1927 in this Court for a declaration that the above mentioned transaction was in contravention of the conditions of the Murshidabad Act of 1891. He obtained a decree in that suit on 2nd July 1928, the transaction being set aside on a personal decree for five lakhs of rupees with interest thereon at 6 per cent, per annum being made against him. On appeal a consent decree was made on 13th August 1928 by which the decretal amount was increased from five lakhs of rupees to six and a half lakhs with interest thereon at 6 per cent, per annum compound. It was also directed that the defendant was to pay the premia and keep the two life insurance policies in force which had been given by way of security. Thereafter, Bilasroy Chowdhury and Srilal Chamria assigned the decree of 13th August 1928 in favour of the defendant Rameswarlal Ganeriwalla by two deeds dated respectively 19th December 1928 and 17th January 1929. Thereafter, on the application of the defendant, the Official Receiver was appointed on 7th August 1929 for the purpose of collecting the rents of the aforesaid properties as well as the interest on certain Government securities. The Official Receiver appointed Babulal Chokhani, a cousin of the defendant, as his agent in connection with this matter, on a remuneration of 15 per cent, of the collections.

3. In September 1933 the Murshidabad Estate Administration Act was passed by the Central Legislature. On 23rd January 1935, Mr. K.C De, the Manager of the Estate, in pursuance of the authority vested in him under the aforesaid Act determined the liability of the plaintiff in respect of the debt due to the defendant to be Rs. 26,892-3-6 and reduced interest thereon to 6 per cent, per annum. Thereafter, on appeal, the Board of Revenue modified the award of Mr. K.C De on 28th July 1935 and held that the plaintiff's liability on 1st April 1934 was Rs. 5,42,173. The Board of Revenue further directed that the premia paid after April 1934 in respect of the two policies aforesaid should be added to the debt which should carry interest at the rata of 6 per cent, per annum. The plaintiff maintains that, although the transaction under which he originally became indebted to the defendant or his predecessors took the form of a lease, it was in reality a loan, in respect of which he had repaid considerably more than double the amount of the original principal. He therefore claims that he is entitled to various reliefs under the provisions of the Bengal Money-lenders Act (Bengal Act X [10] of 1940). The main reliefs which he seeks are as follows: (1) That he be released from all liabilities in excess of the limits specified in cls. (1) and (2) of Section 30 of the Bengal Money-lenders Act; (2) that the transaction be re-opened and accounts be taken between the parties; (3) if necessary, the award of the Board of Revenue dated 28th July 1945 be set aside; (4) that the insurance policies be reassigned to him and (6) that proper accounts be taken and the liability, if any, be determined under the provisions of the Bengal Money-lenders Act.

4. The case for the defendant is that the transaction dated 25th July 1920, was a lease to Bilasroy Choudhury and Srilal Chamaria for a period of 21 years in respect of certain properties in Calcutta in consideration of the sum of Rs. 5,00,000 paid as rent for the whole period in advance. He denies that Bilasroy Choud Hury and Srilal Chamaria were his benamdars. He states that, on 30th April 1923 these people mortgaged the leased property to his father Chimonlal Ganeriwalla who died in 1924. Thereafter on 20th January 1927 they executed two deeds in favour of the defendant empowering him to realise the rents issues and profits of the demised properties. He denies that the transaction dated 25th July 1920, was a loan or that he has reimbursed him self in excess of double the amount of the sum advanced to the plaintiff on that date. He further contends that the plaintiff's claim, if any, and the question whether the transaction was a loan or not is now barred by the principles of res judicata or principles akin thereto.

5. With reference to the award of the Board of Revenue dated 28th July 1935, the defendant claims that the debt due to him has become a statutory liability and the decision of the Board of Revenue is final and not open to revision by any Court of law. He goes on to say:

“Having regard to the Murshidabad Acts which are special private Acts complete by themselves the rights and liabilities of the parties are not affected by the Bengal Money-lenders Act which is a subsequent Act and which neither expressly nor by implication interferes with or is intended to interfere with the rights or liabilities created by or under the Murshidabad Acts.”

6. The defendant through his counsel has admitted that he has been repaid more than ten lacs of rupees by the plaintiff but he makes no admission to the effect that the sum so received by him was considerably in excess of double the amount of the sum advanced on 25th July 1920 or with regard to the precise amount which has been received by him, except that between September 1929 and September 1932 the sum of Rs. 8,34,200 was paid to him by the Receiver and that during the subsequent period until March 1942 he received a sum of Rs. 5,09,000 from the Manager of the estate appointed under the Murshidabad Estate Administration Act of 1933. He pleads that a considerable sum of money amounting to about Rs. 3,84,000 is still due to him with interest in respect of the award of the member of the Board of Revenue dated 28th July 1935.

7. The defendant's main contentions, therefore, are that the transaction, dated 25th July 1920 was a lease and not a loan, and that the amount of the plaintiff's liability in respect of this debt has been fixed in accordance with the special provisions of the Marshidabad Estate Administration Act, 1933, the terms of which have not been affected by the provisions of the Bengal Money-lenders Act, 1940, which has no application in this particular case.

8. The following issues were framed:

1. Has this Court any jurisdiction to try this suit? (This issue was subsequently deleted with the consent of both parties.)

2. Is this suit maintainable in view of the provisions of Murshidabad Acts of 1891 and 1933?

3. Does the Bengal Moneylenders Act, 1940, affect the rights and obligations created under the said Mnrshidabad Acts?

4. Is this suit barred by res judicata or principles akin thereto?

5. Is the defendant a bona fide assignee for value without notice and as such protected under Section 36(5) of the Bengal Money-lenders Act, 1940?

6. Is the plaintiff entitled to go behind the decision of the Board of Revenue dated 28th July 1935?

7. Is the plaintiff entitled in this suit in any event to re-open the consent decree dated 13th August 1928?

8. Did the defendent's predecessor lend to the plaintiff a sum of Rs. 5,00,000 in the benami of Bilasroy Choudhory and Srilal Chamaria on 25th July 1920 as alleged in the plaint or at all?

9. Is the transaction dated 25th July 1920, a loan within the meaning of the Bengal Money-lenders Act?

10. Has the defendant or his predecessor reimbursed himself in excess of the double of the alleged original loan?

11. Is the plaintiff entitled to any reliefs under the Bengal Money-lenders Act, 1940?

12. To what relief, if any, is the plaintiff entitled?

9. Issues Nos. 4 and 9.— The first point for consideration is whether the transaction dated 25th July 1920, was a loan within the meaning of the Bengal Money-lenders Act, 1940. In S. 2(12) of the Act “loan” has been defined in the following terms:

“Loan means an advance, whether of money or in kind, made on condition of repayment with interest and includes any transaction which is in substance a loan.”

10. Certain exceptions are then mentioned with which we are not concerned.

11. The indenture under which the transaction was effected was drawn up in the form of a lease for a term of 21 years, in consideration of a sum of rupees five lacs

“as advance of the total rent payable for and during the said term of 21 years the annual rent be one equal twenty-one part of the said total rent and the said lessees do hereby covenant with the said lessor in manner following, that is to say, that the said lessees shall pay to the said lessor at or immediately before the execution of these presents the said sum of rupees five lacs as advance of the total rent payable during the said term of 21 years.”

12. The demised premises consisted of a number of Calcutta properties which, according to the schedule attached to the lease, yielded a rental of approximately sixty thousand rupees per annum. The lessees covenanted to pay the owner's and occupier's shares of the rates and taxes, to keep the boundaries of the said demised premises in fact and to take certain other measures for the protection of the property, which are set forth in the body of lease which further provides that “the said lessor doth hereby covenant with the said lessees that they paying the rent hereby reserved and observing and performing the covenants and conditions herein contained and on their part to be observed and performed shall and may peaceably and quietly possess and enjoy the said premises hereby demised during the term of twenty one years without any lawful interruption from or by the said lessor or any person rightfully claiming from or under him.”

13. The learned Advocate-General on behalf of the defendant argues that, having regard to the terms of the indenture, dated 25th July 1920, this transaction cannot be regarded as a loan within the meaning of Section 2(12) of the Bengal Moneylenders Act. In this connection he points out that the indenture contains no express condition for the repayment in any event of the amount advanced, together with interest, and in support of this contention he refers at some length to the lessees' covenants any breach of which would have given the Nawab Bahadur an immediate right of re-entry without repayment of the principal sum advanced. He has also referred to the proceedings taken by the Nawab Bahadur himself in 1927 when he filed a suit for the purpose of setting aside the lease, dated 25th July 1920. The plaint in that suit did not proceed on the footing that the transaction dated 25th July 1920 amounted to a loan, but was based on the contention that it represented a lease which was in contravention of the provisions of the Murshidabad Act of 1891, the first condition of which was in the following terms:

“The said Nawab Bahadur shall not nor shall any of his successors in the said titles sell, mortgage, devise or alienate the said properties respectively or any of them otherwise than by lease or demise for a term not exceeding 21 years, and under a rent without bonus or salami.”

14. The Nawab Bahadur's main contention as set forth in his plaint in Suit No. 1384 of 1927 appears to have been that the sum of Rs. 5,00,000 was really intended to be a bonus or salami. When this suit came before Page, J. in July 1928 Sir B.L Mitter on behalf of the plaintiff put forward a two-fold objection to the lease (i) that it was for a premium which was not allowed by the Act and (ii) that the document was in effect a usufructuary mortgage in which possession had been given to the mortgagee. The second of these contentions was not discussed in the judgment which was delivered by the learned Judge but Page, J. nevertheless decided the suit in favour of the Nawab Bahadur on the finding that:

“I have no doubt that the five lacs which the lessees agreed to pay to the lessor under the indenture of 25th July 1920 was a premium or salami and not rent, notwithstanding that it is stated therein to be an advance of the total rent payable. In my opinion the terms of this lease clearly offended against the provisions of condition (1).”

15. On the basis of this finding the learned Advocate General argues that the present suit is barred by res judicata or principles akin thereto. He suggests that having regard to the terms of the finding at which Page, J. arrived, it must be held to have been finally decided that the transaction dated 25th July 1920, was a lease which had been rendered invalid by reason of non-compliance with the first condition as set forth in the Murshidabad Act of 1891 and could in no circumstances be regarded as a loan. I am not prepared to accept this contention. It so happened that in view of the issues which had to be decided by Page, J. it was not necessary to consider the second argument put forward by Sir. B.L Mitter that the document was in effect a usufructuary mortgage. In any case the question whether or not the transaction dated 25th July 1920, was a loan must now be considered with reference to the definition of “loan” as contained in Section 2(12) of the Bengal Money-lenders Act 1940, which was not in existence in 1928. No question of res judicata can therefore arise.

16. If the definition of a loan had merely been to the effect that it meant “an advance, whether of money or in kind, made on condition of repayment with interest,” on a strict construction of the language of such a definition it might have been possible to hold that the transaction dated 26th July 1920, was not a loan. In my view, however, the words “and includes any transaction which is in substance a loan” render it necessary to give a liberal construction to the terms of the so-called lease in the light of what must have been the real intention of the contracting parties at the time when this document was executed.

17. There is no doubt that in July 1920 the Nawab Bahadur of Murshidabad was financially embarrassed. The evidence in this connection indicates, that his main concern at that time was to obtain a loan of Rs. 5,00,000. So great was his anxiety to achieve this purpose that he seems to have signed the indenture without reading it carefully as he was under the impression that it contained a clause to the effect that the demised premises would be returned to him if he repaid the advance before the termination of the lease. In fact, the document contained no such clause. Even on the basis of the estimated rental as set forth in the schedule to the indenture the demised property was extremely valuable. Had he been properly advised or had he given a moment's consideration to the precise implications of the lease to which he put his signature it is hardly to be supposed that, the Nawab Bahadur would have agreed to place the lessees in possession of this property for a period of 21 years as security for the very inadequate advance of five lacs of rupees. The lessees were so anxious to conclude the transaction that they were even prepared to run the risk of the lease being declared void. On this point Page, J. in his judgment dated 2nd July 1928, says:

“to my mind it is clear that the lessees were content to risk the chance of the lease being held to be void in order to obtain the very substantial benefits which they thought would accrue to them through being put into possession of the demised premises.”

18. In these circumstances, I am of opinion that the lessees' covenants which are by no means onerous in their nature can only be regarded as mere formalities inserted for the purpose of giving the indenture the form of a lease for 21 years. In all human probability it is not to be supposed having regard to the advantageous terms of the lease that the lessees would not have taken every precaution to see that their covenants were fulfilled to the letter.

19. On the assumption that the lease would remain in force for 21 years it contained adequate provisions not only for the repayment of the principal but also for a further sum considerably in excess of the principal which in the normal course of events would be collected by the lessees in the form of the rents issues and profits of the demised premises. It is true that the indenture makes no mention of any particular rate of interest but in view, of the definition of “interest” as contained in Section 2(8) of the Bengal Money-lenders Act, this does not appear to be material. This definition is as follows:

“Interest includes any sum by whatsoever name called, in excess of the principal paid or payable to a lender in consideration of, or otherwise in respect of a loan whether the same is charged or sought to be recovered specifically by way of interest or otherwise.”

20. It is admitted by the learned Advocate General that while the lessees or their successors were in possession they actually collected in respect of the demised premises more than ten lacs of rupees. Although the amount in excess of the principal sum advanced by them was not paid to them directly by the borrower it was certainly paid to them indirectly by him. It therefore falls within the definition of “interest” as contained in Section 2(8) of the Bengal Moneylenders Act.

21. Further although the indenture did not contain an express condition of repayment it was certainly contemplated by the parties that re-payment should be ensured by placing the lessees in possession of the demised property for a period of 21 years.

22. In these circumstances I must hold that the transaction, dated 25th July 1920, was in substance a loan within the meaning of the definition of “loan” in Section 2(12) of the Bengal Money, lenders Act, 1940. These issues must be decided in favour of the plaintiff.

23. Issue No. 5.—It is not seriously contested that the defendant is not bona fide assignee for value without notice. The onus lies on the plaintiff to show that the defendant does not fall within this category, and this onus has not been discharged.

24. The question must, however, be considered whether or not the defendant, as a bona fide assignee for value without notice is protected under Section 36(5) of the Bengal Money-lenders Act, 1910.

25. With regard to this point there is a considerable conflict of judicial opinion in this Court. In the case of Rai Manmatha Nath Bose v. Sm. Renula Bose, 45 C.W.N 863 : (A.I.R (28) 1941 Cal. 681), I held that such an assignee is not protected by S. 36(6) of the Act. When this matter came before the Court of Appeal in July 1941 the learned Chief Justice held that a pre-Act assignee was protected by S. 36(5) of the Act, while the contrary opinion was expressed by Nasim Ali, J. In a later case Bhupendra Nath Dutt v. Devendra Nath, 46 C.W.N 368 : (A.I.R (29) 1942 Cal. 370), Sen, J. held that S. 36(6) applied to pre-Act assignees and that a bona fide assignee for value who had taken the assignment before the Act came into force would not be affected by S. 36 of the Act, while Roxburgh, J. in the case of Krishnadhon Mandal v. Nalini Chandra Purkait, 46 C.W.N 388, held that S. 36(5) of the Act did not give protection to an assignee who took his assignment prior to the Act. In the case of Hemanta Kumar Mukherjee v. Basanta Kumar Muhherjee, 46 C.W.N 677 : (A.I.R (30) 1943 Cal. 26), Gentle, J. agreed with the opinion expressed by the learned Chief Justice in Renula, Bose's case: (45 C.W.N 863 : A.I.R (28) 1941 Cal. 681). Gentle, J.'s decision was, however, really to the effect that whatever view may be taken of the rights of an assignee under Section 36(5) of the Bengal Money-lenders Act, 1940, if the limits imposed by S. 80 of the Act have been exceeded, the borrower is entitled to a declaration releasing him from further liability. Admittedly this decision cannot be regarded as a decision of a Division Bench to the effect that a pre-Act assignee is in fact exempted from the operation of Section 36 of the Bengal Money-lenders Act. In view of this conflict of judicial opinion I adhere to the view plaintiff would at once be relieved from the which I expressed in the case of Manmatha Nath Bose v. Sm. Renula Bose, 45 C.W.N 863 : (A.I.R (28) 1941 Cal. 681), and hold that the defendant is not protected by S. 36(5) of the Act. This issue must accordingly be decided in favour of the plaintiff.

26. Issue No. 8.— This issue was not seriously pressed. No evidence was given to show that the defendant's predecessor lent the plaintiff a sum of Rs. 5,00,000 in the benami of Bilas Boy Chowdhury and Srilal Chamaria. This issue must, therefore, be answered in the negative.

27. Issue No. 10.— The learned Advocate-General admits on behalf of his client that a sum exceeding Rs. 10,00,000 was repaid by the plaintiff in respect of the advance of Rs. 5,00,000 which was taken by the plaintiff on 25th July 1920. Beyond this he makes no admission with regard to the exact amount which was repaid after the advance was taken. In this connection, he mentioned that if it were necessary to regard the original loan as being the sum of Rs. 6,60,000, which represents the amount of the personal decree passed against the plaintiff by consent on 13th August 1928, it might be considered whether by applying the principles laid down by Mitter and Akram JJ. in the case of Nripendra Chandra Saha Chowdhury v. Mahammad Abbas Ali, 47 C.W.N 578 : (A.I.R (31) 1944 Cal. 113) it would not be necessary for the plaintiff to prove that a sum exceeding Rs. 13 lacs had been repaid to the defendant after the date of the consent decree. It will, however, be seen hereafter in discussing issues 11 and 7 that this point will not arise. This issue in so far as it relates to the transaction dated 25th July 1920 is decided in favour of the plaintiff.

28. Issues Nos. 11 and 7.— One of the main points that has been argued on behalf of the plaintiff in this case is that if it be held that the transaction dated 25th July 1920, represents a loan, and not a lease and it be found that the plaintiff bad repaid to the defendant or his predecessors a sum exceeding twice the amount of the principal advanced on 25th July 1920, he is entitled under the general law to a declaration releasing him from all further liability in respect of this loan and that he has this right notwithstanding anything contained in Section 36 of the Bengal Money-lenders Act.

29. Although the plaint appears to have beer framed primarily with a view to the exercise by the Court of the powers specified in Section 36(1) of the Bengal Money-lenders Act, Mr. Banerjee strongly presses his client's claim for a general declaration absolving him from further liability as or alternative relief quite apart from the provision of S. 36. By obtaining such a declaration the plaintiff would at once be relieved from the restrictions which circumscribe the exercise of the powers of the Court under S. 36 for the purpose of giving relief to the borrower, and in particular, it would no longer be possible for the defendant to urge that he was protected by provisos (i) and (ii) of cl. (1) of S. 36. It is therefore important to consider whether in a, matter of this sort the plaintiff is at all entitled; to any relief apart from the provisions of S. 36.

30. In support of his argument, Mr. Banerjee has referred to two cases in which general declarations of further non-liability were granted, namely, the cases of Manmatha Nath Bose v. Sm. Benula Bose, 45 C.W.N 1091 and Hemanta Kumar Mukherjee v. Basanta Kumar Mukherjee, 46 C.W.N 677 : (AIR (30) 1943 Cal. 26). In the first of these cases the learned Chief Justice observed:

“I am not satisfied that it is necessary for the relies of the borrower in this case that the powers under S. 36 shall be exercised at all. The Act in S. 30, sub-s. (1)(a) has said that his liability is limited to twice the principal of the original loan, and it is, clear in the present case that has been paid. That being so, the plaintiffs—the judgment-debtors—are entitled to a declaration that they are not liable to pay any more money-under the final mortgage decree (which is of course is respect of the principal and interest of the original loan); the sum legally due under that final mortgage decree is satisfied.

31. Again, S. 36 is a procedural section and it is only, when the procedure indicated in S. 36 is used, that the question of the applicability of S. 36(5) arises. There is nothing in the procedure laid down by Section 36 which affects the CPC. As I read the provisions of S. 36, they are not in substitution of the provisions of the Code of Civil Procedure, They are supplemental to them. If the debtors ask that the Court should use the provisions of S. 36, the Court must ask itself whether it has reason to believe that the exercise of one or more of the powers under the section would give relief to the bonower. If Section 36(5) protects the rights of the pre-Act assignee of the money-lender, then in this particular case using the provisions of S. 36 would not give relief to the borrower so that the Court would not exercise its powers under S. 36.”

32. In the latter case Gentle, J. observations are as follows:

“The process of re-opening is to enable the position between the patties to be ascertained by taking accounts (when that is necessary to be done) in order to discover either whether the borrower has discharged his liability or the amount remaining due in light of the provisions in S. 30, When for example a calculation of the rate of interest or investigation of the payment made, are required then relief cannot be given until the transaction is re-opened and these things have been done. When, however, it is apparent that the borrower has paid double the amount of the original loan, there is no-need to re-open the transaction and to take an account. In such event S. 30 terminates the borrower's liability as it enacts he is not liable to pay anything more. This is quite apart from relief being given by the Court after it has directed the transaction to be re-opened. There is nothing in S. 30 which makes its provisions subject to their being invoked under S. 36. There is no need for the borrower to do anything more than to show the sum he has paid is equal to or exceeds twice the amount of the principal of the original loan. Upon this being manifest the statutory provision immediately applies and this liability is, therefore, determined as S. 30 enacts he is not liable for any further sum.”

33. In each of the above-cited cases, the declaration which was granted appears to have had the effect of modifying a decree by reducing the debtor's liability to the extent to which the limits imposed by S. 30 of the Act had been exceeded. According to a series of decisions of this Court to which I will presently refer, it is difficult not to hold that such modification amounts automatically to a re-opening of the decree, and, therefore, necessarily involves the exercise of the Court's powers under Section 36 of the Bengal Money-lenders Act.

34. The first of these cases is that of Anath Nath Sarkar… v. Rajendra Nath Bhattacharjee…Opposite Party.*, 45 C.W.N 975 : (A.I.R (29) 1942 Cal. 120) which was decided by Mukherjea and Sen, JJ. in which the learned Judges observed:

“In the present case the Court has found that the judgment-debtor is entitled to relief under sub-cl. (c) of sub-s. (1) of S. 36, as he was made liable for interest exceeding the limits prescribed by S. 80 of the Act. As the decree has already been passed by which the excess interest was given, the Court has got to reopen the decree for the purpose of exercising its powers under sub-cl. (c) of sub-s. (1) of S. 36. The Court below, therefore, was not justified in saying that the decree should not be re-opened in this case. The reduction of the decretal dues as well as revision of the order for costs did, in our opinion, amount to a re-opening of the decree. As the Court in reality has re-opened the decree, it is bound to make a new decree as contemplated by Section 36, clause (2) of the Bengal Money-lenders Act.”

35. The same view was taken by Sen, J. in the case of Mritunjoy Roy v. Netai Chand Dutt 46 C.W.N 976 : (A.I.R (29) 1942 Cal. 123) in which the learned Judge said:

“When, however, the relief is sought after a decree has already been passed making the defendant liable to pay interest at a rate in excess of the limit specified in S. 30 can the Court grant this relief without re-opening the decree? I entirely fail to see how it can. So long as a decree is in force the decree-holder is entitled to enforce it as it stands, and the judgment-debtor is bound to obey St as it stands. The rights and liabilities under the decree cannot be whittled down without interference with the decree.”

“In order to exercise my powers under S. 36(1)(C) of the Act, i.e, in order to relieve the borrowers from all liability to pay interest in excess of the limits specified in S. 30, I must first take hold of the decree, examine it and then relieve the borrowers from the performance of so much of it as the Act allows. In other words I must first re-open the decree. I find it impossible to appreciate how a decree can remain intact when a portion of it is truncated and nullified. The relief claimed can be granted only after re-opening the decree.”

“Once the decree is re-opened the Court must under the provisions of S. 36(2), pass a new decree in accordance with the provisions of the Act.”

36. The decision in the case of Juggannath Roy v. Madan Mohan Burman, 45 C.W.N 1042 : (A.I.R (29) 1942 Cal. 125) is to the same effect.

37. Biswas and Roxburgh, JJ. expressed the same view in the case of S.K Budhan Mia…Judgment-Debtor, v. Jotindra Mohan Dutt…Decree-Holder, .*, 46 C.W.N 129 : (A.I.R (29) 1942 Cal. 132) and a similar view has been taken by other Judges in the cases of Promode Nath Sinha v. Raseswari Dassi, 46 C.W.N 153 : (A.I.R (29) 1942 Cal. 128), Kumud Behari Sen v. Satyabrata Sen, 46 C.W.N 605 : (A.I.R (30) 1943 Cal. 169) and Lal Mohan Chatterjee v. Suresh Chandra Mukherjee, 46 C.W.N 607 : (A.I.R (30) 1943 Cal. 170).

38. There appears, therefore, to be a conflict of judicial opinion in this Court with regard to this matter. It has been argued by Mr. Banerjee that I am bound to follow the procedure that was adopted in this matter by the Court which hears appeals from the original side in the case of Manmatha Nath Bose v. Sm. Rentila Bose, 45 C.W.N 1091. The only direct authority on this point which he has been able to quote is an observation contained in an unreported decision of Gentle, J., in the case of Mahammad Amin v. Jogendra Kumar Banerjee, in which the learned Judge observed that he was bound to follow a decision given in an appeal from a Judge sitting on the original side of this Court in preference to a decision of an Appellate Bench dealing with an appeal from the muffasil. I find nothing either in cl. 15 or in cl. 16, Letters Patent, to warrant the distinction which Gentle, J. has sought to draw. Whether the appeal be one from a Judge of the High Court or from a decision of a Court subject to the superintendence of the High Court, the appellate jurisdiction is exercised by the High Court in both cases. The decisions of Appellate Benches consisting of two Judges, whether such Benches are constituted under cl. 15 or cl. 16, Letters Patent, are, in my view, entitled to an equal degree of respect, particularly in connexion with a matter such as the Money-lenders Act, which applies not only to Calcutta but also to the muffasil. In the present case I feel compelled to adopt the view which seems logically to follow from the majority of the decisions taken on the appellate side of this Court with regard to this matter.

39. After a careful consideration of the cases cited above in the light of the general scheme of Bengal Money-lenders Act, I cannot avoid coming to the conclusion that the Legislature intended that the measure of relief afforded to borrowers in respect of loans and decrees passed in respect of loan should be limited by the restrictions imposed by S. 86 of the Act, which only permits the re-opening of transactions or decrees in respect loans or the release of the borrower from further liability under the express conditions mentioned in that section. The Moneylenders Act is a general Act for the purpose of regulating money-lending transactions in Bengal and it seems to me only reasonable to suppose that in an Act of this nature where a procedure for obtaining relief has been provided in the Act itself, it must have been intended that a borrower who wishes to obtain relief from his contractual obligations in respect of a loan should have recourse only to the procedure provided in the Act itself and that the opening words of S. 36 “Notwithstanding anything contained in any law for the time being in force” must in this respect have the effect of excluding the operation of such general statutes as the Code of Civil Procedure or the Specific Relief Act in so far as those statutes might be construed as providing remedies unfettered by the restrictions of Section 36 of the Bengal Money-lenders Act. This Act gave the borrower a new right and imposed a corresponding liability on the lender in respect of loans. This matter, therefore, appears to fall within the third class of cases mentioned by Willes, J. in his judgment in the case of The Wolverhampten New Waterworks Company v. Hawkesford (6 Scott's Rep. (N.S) 356 in which the learned Judge observed:

“There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common-law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of cases is where the statute gives the right to sue merely, but provides no particular form of remedy; there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. The present case falls within this latter class, if any liability at all exists. The remedy provided by the statute must be followed and it is not competent to the party to pursue the course applicable to cases of the second class.”

40. In this view I am fortified by certain conclusions at which Roxburgh and Akram, JJ. have arrived in Full Bench Reference No. 2 of 1912 in which they disagree with the decision of the learned Chief Justice and Nasim Ali, J. in the case of Rai Manmatha Nath Bose v. Sm. Renula Bose, 45 C.W.N 1091. The learned Judges point out that in their opinion “Section 30(1) by itself can have no effect to give relief in respect of a decree passed prior to the Act”; and that S. 36 of the Act provides for the relief in respect of a limited class of old decrees (and possibly in respect of decrees passed after the Act). Further in discussing the question whether or not relief may be given under S. 30 independently of S. 36 they say:

“But there is then little point in the provisions in S. 36 and in the restrictions contained therein confining relief in respect of ‘wrong’ decrees to a limited class therein defined which is liable to be affected. In our opinion such an interpretation is not possible.”

41. I must, therefore, hold that, if the plaintiff is at all entitled to relief in this case, he can only be given such relief under the provisions of Section 36 of the Bengal Money-lenders Act, and subject to the restrictions stated therein.

42. The more important relief for which the Nawab Bahadur asks in his plaint is that the transactions between the parties should be re-opened and that accounts should be taken and further that he should be released from all liability in excess of those specified in cls. (1) and (2) of S. 30. The main transaction which has to be re-opened if the plaintiff is to obtain relief is Sir Frederick Sachse's decision, dated 28th July 1935, in which it was held that the manager was not empowered under Section 11 of the Murshidabad Estate Administration Act, XXIII [23] of 1933, to go behind a decree of the civil Court. Sir Frederick Sachse went on to say:

“The Board must, therefore, hold that the Rs. 6½ lakhs of the consent decree must be taken as the starting point of this claim. From this amount must be deducted all amounts actually paid. To it must be added all interest which has become due according to the High Court decree and also the amount of all premia paid up-to-date. On this basis the claim on 1st April 1934, amounted to Rs. 5,42,173 and this amount is now admitted in modification of the Manager's order…. The order is that the premia paid and to be paid after April 1934 will be added to the debt as also interest at 6%”

43. If this transaction is reopened, it will be necessary to take accounts between the parties as admittedly certain sums have been paid on or after 1st January 1939 which might be refundable to the plaintiff under S. 36(1)(d) of the Act if it is found that he is at all entitled to relief under S. 86. The question whether or not Sir Frederick Sachse's decision can be reopened will be discussed in connection with issues No. 2, 3 and 6, but, on the assumption that it is possible to reopen this decision it remains to be considered whether such reopening will be sufficient to afford the plaintiff any relief under the provisions of the Bengal Money-lenders Act.

44. In my view the immediate effect of reopening Sir Frederick Sachse's order dated 28th July 1935, would be to place the parties in the same position as they were before that order was passed and before the consent decree dated 13th August 1928 had merged in the above mentioned order of the Board of Revenue. I am not prepared to accept Mr. Banerjee's argument to the effect that after the reopening of Sir Frederick Sachse's order, it would be possible to ignore the consent decree dated 13th August 1928, in order to escape from the operation of the two provisos to S. 36(1) of the Act. Mukharjee and Biswas JJ. had occasion to consider a similar argument in the case of Tarapada Banerjee v. Ajimaddin Mallick, 45 C.W.N 969 : (A.I.R (28) 1941 Cal. 699). In that case they were dealing with a mortgage dated 2nd June 1928, the consideration for which consisted in the total of certain sums due under two previous decrees passed in 1927. The two decrees were not decrees in suits to which the Act applied within the meaning of Section 2(22) of the Bengal Moneylenders Act, and the learned Judges held that:

“The consideration for the mortgage of 2nd June 1928 was the total of the two sums which were due under these decrees and the reopening of the mortgage transaction must necessarily, therefore, Involve a re-opening of the two decrees. It is no answer to say that the decrees had ceased to exist by reason of the execution of the new bond in lieu thereof and that, therefore, there were no decrees to be affected. Proviso (ii), as we apprehend, does not mean that a decree may not be affected within the meaning thereof, if it is no longer subsisting. On the other hand it seams to us clearly to contemplate the affecting of decrees which were already satisfied. Such satisfaction might be the result of payment in Court or out of Court, or on other grounds, as would appear to be the case here.”

45. If, therefore, the decision of the Board of Revenue, dated 28th July 1935, be re-opened, it will be necessary for the plaintiff in order to obtain the relief which he seeks also to re-open the consent decree dated 13th August 1928, which would be automatically revived by the re-opening of the order. To do this, however, would be in direct conflict with the two provisos to S. 36(1) which are in the following terms:

“Provided that in the exercise of these powers the Court shall not

(i) re-open any adjustment or agreement, purporting to close previous dealings and to create new obligations, which has been entered into at a date, more than twelve years prior to the date of the suit by the parties or any person through whom they claim, or

(ii) do anything which affects any decree of a Court other than a decree in a suit to which this Act applies which was not fully satisfied by the 1st day of January 1939, or anything which affects an award made under the Bengal Agricultural Debtors Act, 1935.”

46. From the terms of settlement which were included in the consent decree, dated 13th August 1928, this decree represented an adjustment or agreement purporting to close previous dealings and to create new obligations. It was entered into more than 12 years before the date of the present suit. Further, the decree in question is not decree in a suit to which this Act applies within the meaning of S. 2(22) of the Act as it was not made in a suit which was instituted or filed on or after 1st January 1939, or was pending on that date. The consent decree had in fact ceased to be an executable decree on the publication of an order for the appointment of a manager under Section 3 of the Murshidabad Estate Administration Act, XXIII [23] of 1933, which had certain consequences provided in S. 4 of the Act, the second of which was to the effect that as long as the management continued no suit or proceeding should lie against the Nawab Bahadur in respect of any debt or liability to which he might be subject.

47. The two above-mentioned provisos there-fore constitute a complete bar in respect of the plaintiff's claim to relief under the provisions of the Bengal Money-lenders Act, and it is not therefore necessary to consider the question as to the precise amount which may have been repaid to the defendant or his predecessors in excess of the sum of 10 lakhs of rupees or whether the amount of 6½ lakhs should be regarded as the original loan according to the principles followed in the judgment of Mitter and Akram, JJ. in the case of Nripendra Chandra Saha Chowdhury v. Md. Abbas Ali, 47 C.W.N 578 : (A.I.R (31) 1944 Cal. 113).

48. Had it been necessary for the purpose of any decree which might be passed in this suit to ascertain the precise amount for which the plaintiff was entitled to receive credit on account of repayment of the loan and the interest thereon, I would have directed the registrar to take an account with regard to this matter and to refer, if necessary, to such of the account books of the defendant and his predecessors as might still be in existence and which might throw any light on this matter. As I hold, however, that these issues must be decided against the plaintiff the necessity for holding any such enquiry does not arise.

49. Issues 2, 3 and 6: These are probably the most important issues in the case and they raise a very interesting question as to the extent to which a general Act such as the Bengal Money, lenders Act of 1940 can be held to modify a prior special Act such as the Murshidabad Estate Administration Act, XXIII [23] of 1933. Although reference is made to the provisions of the Murshidabad Act of 1891 in Issue no. 2, we are not at present directly concerned with the construction of the provisions of that Act. It is admitted that the Secretary of State actually entered into and upon the immoveable properties of the Nawab Bahadur of Murshidabad in pursuance of the powers vested in him by the provisions of the Murshidabad Act of 1891 and this fact is recited in the preamble to the subsequent Act of 1933. The matter with which we are immediately concerned arises in connection with the settlement of the defendant's claim under the provisions of Rs. 11 and 13, Murshidabad Estate Administration Act, and with reference to this question Mr. Banerjee's contention is that the plaintiff is entitled to re-open Sir Frederick Sachse's decision, dated 28th July 1935, under Section 3-B of the Bengal Money-lenders Act, 1940 and that alternatively his client is entitled to a declaration independently of Section 86 of the Bengal Money-lenders Act which will operate to release the plaintiff from all liabilities in respect of Sir Frederick Sachse's decision in excess of the limits imposed by Section 30 of the Money-lenders Act; as a corollary to this alternative form of relief he also claims an injunction restraining the Manager of the Nawab Bahadur's estate from making any further payment under Sir Frederick Sachse's order, dated 28th July 1935.

50. Quite apart from the considerations which arose in connection with Issues Nos. 11 and 7, I must hold that:the plaintiff is not entitled to any alternative relief on the lines suggested by Mr. Banerjee as S. 30 standing alone can, in my opinion, have no possible application in respect of the amount of a debt or liability determined under Sections 11 and 13 of the Murshidabad Estate Administration Act. Section 30 of the Bengal Money-lenders Act, relates to loans, interest on loans and decrees in which loans may have merged.

51. The debt or liability which has been determined under Section 11 or Section 13 of the Murshidabad Estate Administration Act, does not fall within any of these categories. Even on the assumption that the transaction dated 25th July 1920, originally represented a loan this loan subsequently merged in the award of the manager or in that of the member of the Board of Revenue under Sections 11 and 13 of the Murshidabad Estate Administration Act. This award was certainly not a decree but may be described as having created a statutory liability which was incapable of execution in any legal proceeding which might be instituted by the defendant during the period that the Nawab Bahadur's estate remained under the administration of the manager appointed under the Act. The creditor's only means of obtaining, payment in respect of a claim as determined under the Murshidabad Estate Administration Act was by means of the exercise by the manager of his statutory functions under S. 14 which provided that after meeting certain claims mentioned in that section he should distribute any balance “rateably among the other creditors of the Nawab Bahadur in payment of their claims as so determined.”

52. It follows, therefore, that Section 30 of the Bengal Money-lenders Act, standing alone will afford the plaintiff no relief.

53. In order to obtain foe his client the benefit of the reliefs contemplated by the Moneylenders Act it is necessary for Mr. Banerjee to show that Sir Frederick Sachse's decision, dated 28th July 1935, is a transaction which can be reopened under the provisions of S. 36 of the Act in order that on the re-opening of this decision, the Court may exercise the powers set forth in S. 36(1) of the Act. This being the case, even if it be assumed for the moment that the plaintiff on such re-opening of Sir Frederick Sachse's decision would not be fettered by provisos (1) and (a) to Section 36(1) of the Bengal Money-lenders Act, the matter which still requires consideration is whether the Bengal Money-lenders Act has had the effect of repealing or modifying those provisions in the Murshidabad Estate Administration Act which ‘purport to limit and determine the amount of the Nawab's liabilities under the statutory provisions contained therein.

54. There can be no doubt that the Murshidabad Estate Administration Act is a special Act passed for the benefit of a particular individual. The law with regard to the question whether a subsequent general enactment has the effect of repealing a prior special enactment is summarised as follows by Maxwell in his book on the Interpretation of Statutes (8th Ed., 156). The learned author points out that there is a general presumption that:

“A general Act is to be construed as not repealing & particular one, that is, one directed towards a special object or a special class of objects. A general later law does not abrogate an earlier special one by mere implication. Generalia specialibus nom derogant or, id other words, ‘Where general words in a later Act are capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation……that earlier and special legislation is not to be held indirectly repealed, altered or derogated from merely by force of such general words, without any indication of a particular intention to do so.’ In such cases it is presumed to have only general cases in view and not particular cases which have been already otherwise provided for by the special Act.”

55. In support of his argument Mr. Banerjee contends that an intention to repeal any sections in the Murshidabad Estate Administration Act, which may be construed as imposing on the Nawab a liability in excess of the limits mentioned in Section 30 of the Bengal Money-lenders Act, must be inferred from the words “Notwithstanding anything contained in the law for the time being in force,” which appear at the beginning of S. 30 and which introduce S. 36. These words are, however, of a general nature and must be construed with special reference to the subject-matter and objects of the Act in which they appear.

56. In the case of Fitzgerald v. Champneys, (1862) 80 L.J Ch. 777 : (5 L.T 233), Wood V.C had occasion to construe certain terms in a general statute even more explicit and precise than those on which Mr. Banerjee relies. He nevertheless held that the general statute in question did not have the effect of repealing a local and special Act of Parliament to which the general statute made no express reference. He says:

“The reason is, that the legislature having had its attention directed to a special subject and observed all the circumstances of the case and provided for them, does not intend, by a general enactment afterwards to derogate from its own act where it makes no special mention of its intention so to do”

57. The application of the same principle is illustrated very forcibly in Lord Hobhouse's judgment in the case of Barker v. Edger, 1898 A.C 748 : (67 L.J.P.C 116). In that case the question arose whether a general statute known as the Validation Act had the affect of interfering with a prior special enactment relating to proceedings in the Native Land Court of New Zealand. The Validation Act contained a general provision that the commencement of proceedings in the Court constituted under that Act should operate as a stay of proceedings in any other Court in respect of the same matters. It was held by the Court of Appeal in New Zealand that, in spite of the above-mentioned provision, the Validation Act did not affect the proceedings in the Native Land Court. The House of Lords agreed with this view and in this connection Lord Hobhouse stated:

“The general maxim is, generalia specialibus non dercgant. When the legislature has given its attention to a separate subject, and made provision for it, the presumption is that a subsequent general enactment is not intended to interfere with the special provision unless it manifests that intention very clearly. Each enactment must be construed in that respect according to its own subject-matter and its own terms……. It would require a very clear expression of the mind of the legislature before we should impute to it the intention of destroying the foundation of the work which it had initiated some four years before, and to which the Court has ever since been assiduously addressing itself.”

58. As regards its subject-matter the Bengal Money-lenders Act, 1940, is described in its preamble as “an Act further to regulate transactions of money-lending in Bengal.” Section 30 imposes certain restrictions upon the liabilities of borrowers in regard to the amounts which are required to be paid by them in respect of loans, decrees relating to loans and interest on loans. If these limits are exceeded the whole transaction in connection with the loan may be re-opened under S. 36 of the Act. That section provides inter alia that a borrower may be released from all liabilities in excess of the limits specified in cls. (1) and (2) of S. 30, and if necessary, a further decree may be passed in conformity with the provisions of the Act. The Money-lenders Act is one of general application and having regard to its nature and its subject-matter as indicated in its preamble, it seems to me to be only reasonable to suppose that the words “notwithstanding anything contained in any law for the time being in force” which appear in S. 30 refer only to general statutes which by their terms might be construed to impose upon the borrowers a liability exceeding the limits contemplated by that section. The form of the words used may be regarded merely as a convenient method of repealing inconsistent provisions of such statutes as the Interest Act or the Contract Act without making any express reference thereto. Similarly, the use of these words in S. 36, which relates to the procedure to be adopted for obtaining relief under the Moneylenders Act, may be reasonably regarded as modifying or amplifying for the benefit of borrowers (subject to the limitations contained in the section) any statute of general application relating to procedure, such as the Code of Civil Procedure, which would not otherwise give borrowers the measure of relief contemplated by the Bengal Money-lenders Act.

59. In respect of its subject-matter, the Murshidabad Administration Act is entirely different from the Bengal Money-lenders Act. As already pointed out, it is a special Act passed for the benefit of the estate of a particular individual. According to its preamble it is

“an Act to provide for the appointment of a Manager on behalf of the Secretary of State of the properties of the Nawab Bahadur of Murshidabad and to define the powers and duties of the Manager.”

60. The provisions of the Act are extremely drastic and are intended to provide a complete scheme

“to afford the Nawab Bahadur protection against the disabilities to which he is exposed by reason of his embarrassed circumstances and to prevent further increase in his debts and to provide means for such repayment to his creditors as are compatible with the payment to the Nawab Bahadur of a sum sufficient for the maintenance of his position and dignity.”

61. The measure of relief which the Act affords to the Nawab Bahadur in respect of debts and claims against his estate is unusual and almost revolutionary. There can be no doubt that, if the provisions of the Act be read as a whole, as they are intended to be read, they place the Nawab Bahadur of Murshidabad in a far more favourable position as regards his creditors than he could possibly hope to attain by the application of the provisions of the Bengal Moneylenders Act 1940.

62. Section & provides that all proceedings in respect of debts or liabilities pending in any civil Court against the Nawab Bahadur at the time when the manager is appointed shall be barred. It further provides that

“so long as such management continues no suit or proceedings shall lie against the Nawab Bahadur, in respect of any debt or liability to which the Nawab Bahadur is subject.”

63. His property is declared to be exempt from attachment or sale under process of any Court and he is declared to be incapable of entering into any contract which may involve him in pecuniary liability.

64. Sections 8 and 9 provide for the presentation to the manager of claims against the estate and S. 10 provides that any debt or liability which is not duly notified to the manager within the time and in the manner mentioned in Ss. 8 and 9 shall be barred.

65. Section 11 is in the following terms:

“The Manager shall in the prescribed manner determine the amount of the principal of all debts and liabilities not barred under S. 10 justly due to the Several creditors of the Nawab Bahadur and to persons holding mortgages, charges or liens on the property of the Nawab Bahadur and shall determine in like manner the interest, if any, due at the date of such determination in respect of such debts and liabilities and may reduce the rate of interest charges as appears to him just and proper.”

66. Section 13 provides for an appeal to the Board of Revenue against certain orders of the Manager including an order

“determining the amount of a debt or liability or of interest thereon or reducing the rate of interest under S. 11.”

67. In this connection there is a further provision in Section 22 to the effect that all proceedings of the Board, of Revenue under this Act shall be subject to the supervision and control of the Provincial Government.

68. Section 14 provides for the preparation by the Manager of a scheme for the settlement of the Nawab Bahadur's debts and liabilities. It states that provision must be made for payment in full of certain claims and goes on to say that:

“the scheme shall further provide that any balance left after meeting the above claims and each annual residue thereafter shall be distributed rateably among the other creditors of the Nawab Bahadur in payment of their claims as so determined.”

69. Section 27 provides that even after the withdrawal by the Provincial Government from entry upon the immovable properties of the estate

“no Court shall entertain any suit or proceeding against the Nawab Bahadur in which the amount claimed is in excess of the amount determined under S. 11, 13 or 22, as the case may be together with any further interest due thereon, or in which interest is claimed at a rate higher than the rate determined as just and proper under those sections.”

70. In applying the procedure as laid down in the Act, it might conceivably happen as is alledged in this case, that the manager or the Board of Revenue, after taking all the relevant facts into consideration, might determine as “justly due” to a creditor a sum exceeding the limits which were subsequently prescribed in 1940 for the benefit of ordinary borrowers by Section 30 of the Bengal Money-lenders Act. On the other hand, it must not be forgotten that the Murshidabad Estate Administration Act imposes upon the creditors of the Nawab Bahadur many disabilities and restrictions which are not contemplated by the terms of the Bengal Money-lenders Act. For instance, the Nawab Bahadur's creditors are under a statutory disability which debars them from suing for the amount of any debts as determined by the manager, they are unable to execute any decrees which they may have obtained against the estate before the appointment of the manager and the period within which they may be able ultimately to realise the amounts determined as “justly due” to them depends on the amount of the balance available for distribution under S. 14 of the Act. In these circumstances to allow the Nawab Bahadur simultaneously to benefit from the provisions of the Murshidabad Estate Administration Act and those of the Bengal Money-lenders Act would amount to an anomaly which cannot have been intended by the legislature. To do so would disturb the balance of the former Act and would be entirely inconsistent with the general scheme which underlies it. On the other hand on a reasonable construction of its provisions the terms of the Bengal Money-lenders Act cannot be regarded as inherently inconsistent with or repugnant to those of the Murshidabad Estate Administration Act. The scope and the subject-matter of the two enactments are essentially different, and if they are properly construed it in possible to give effect to both Acts standing together. As pointed out by A.L Smith, J. in the case of Kutner v. Phillips, (1891) 2 Q.B 267 : (60 L.J.Q.B 605):

“A repeal by implication is only effected when the-provisions of a later enactment are so inconsistent with or repugnant to the provisions of an earlier one, that the two cannot stand together, in which case the maxim “leges posteriores contrarias abrogant” applies. Unless two Acts are so plainly repugnant to each other that effect cannot be given to both at the same time, a repeal will not be implied, and special Acts are not repealed by general Acts unless there is some express reference to the previous legislation, or unless there is a necessary inconsistency in the two Acts standing together.”

71. In my opinion, this is essentially a case in which the principle of “generalia specialibus non derogant” should be held to apply. I must, therefore, hold that the provisions of the Murshibabad Estate Administration Act are unaffected by those of the Bengal Money-lenders Act and that the plaintiff is not entitled to go behind the decision of the Board of Revenue, dated 28th July 1935. These issues must therefore be decided in favour of the defendant.

72. Issue 12— It follows that the plaintiff is entitled to no relief and this suit must be dismissed with costs. Certified for two counsel. The injunction dated 28th June 1943 stands dissolved.

D.H

73. Suit dismissed.